Stapleton Secures Short-Term Loan For General Fund, July 17, 2014

FOR IMMEDIATE RELEASEJuly 17, 2014

Stapleton Secures Short-Term Loan For General Fund

DENVER – This week, Treasurer Walker Stapleton successfully closed a 12-month note for $500 million that will be used on behalf of Colorado’s general fund. The loan was secured at an impressively low interest rate of 0.11 percent.“The state’s strong credit rating, which my office safeguards, is the reason that we’re able to secure such good rates,” Stapleton said. “This saves taxpayers a lot of money when it comes time to pay back the loan, and it allows the state to smoothly conduct government business in the most fiscally responsible way possible.”The General Fund Tax Revenue Anticipation Notes (GTRANS) is a short-term cash flow borrowing program the state does on behalf of the general fund. As tax revenues flow into state coffers in different clumps throughout the year, GTRANS is used to smooth out cash flow between when the fiscal year starts in July and when revenues are actually collected. According to Moody’s, the State exhibits the following strengths that allow it to borrow at such a low rate:

Pledge of general fund revenues and requirement to use borrowable funds if necessary to repay notes, providing more-than-sufficient available resources.

Substantial balances in other state funds and accounts.

History of strong financial management.

History of use of cash management tools to preserve cash for priority payments and GTRAN repayment.

The Treasurer’s office recently closed a similar deal for 22 Colorado school districts at a historically low rate of 0.109 percent.